Notes/Errors/Corrections – Austin City Council Homestead Exemption Work Session video

UPDATE 5/21/2015: So far, the city has corrected 1 of the items that I have listed below (Item 1). They have come close to correcting a second item (Item 3). I am working on a new way to prove to them that Item 5 exists & is a big deal, without needing to refer to internals of the TCAD database.

UPDATE 5/21/2015: Actually, Item 3 is fully & accurately corrected in their revised slides. So, Item 1 and Item 3 are fixed.

UPDATE 6/9/2015: I don’t have an updated homestead presentation from the city. However, the city released a fiscal note before the 6% homestead exemption vote. The fiscal note lists the cost to city revenue of a 6% homestead exemption, at the .4824 tax rate, at $7.6 million. This is up from their previous estimate of $5.2 million on slide 18 of the presentation.  That’s great — much closer to what I get in my calculations!

This stuff is complicated and quite difficult to write about. I’ve been trying to keep these “UPDATE” sections short, but this one is going to have to be involved, because I need to document this update, in case I need to reference it in the future …

Last week, I spent a couple of hours trying to somehow get anywhere near the $5.2 million cost that the city put on slide 18, but could never come close anywhere near it. Thus, I’m not surprised to see the $5.2m number revised (note that the lower half of slide 18 had already been corrected, after I sent the city an explanation of Item 3).

Whenever I calculate the cost of a 6% homestead exemption at .4824, I get a bit over $8 million, relative to the current $5000 (.01%) homestead exemption. Or, a bit over $11 million, relative to no homestead exemption.  As you can see, nowhere near $5.2 million.

So, that puts their latest number — $7.6 million — within half a million dollars of my number. I think we are on the same page now. I’m still a bit higher, which is a little weird, but it’s now close enough that there are several possible explanations for the $500K difference.

Given that, I’m going to say the city has that number fixed now (or, rather they have that calculation fixed). And, though it is only one of the valuations on one slide/fiscal note, if they fixed that one then it is reasonable to assume all the district valuations are now corrected (and probably the total valuations as well) — or, as corrected as possible barring the effects of Item 5.

While they now have correct, or damn close, valuations, I don’t actually know how they got to that number. But, given the dollar figures, the type of calculation we’re talking about, and the close proximity to my email detailing my suspicions about Item 2, below, I am going to speculate that it’s highly likely that the low valuation was due to math applied to taxable valuation, which is Item 2.

I am now certain that the city’s numbers are ‘taxable’, rather than ‘assessed’. I have confirmed this by screen-scraping thousands of properties from TCADs website, in order to have 2015 preliminary values, just like those used for the city’s calculations.

It makes a lot of sense for the city to use ‘taxable’ values for most of what they are doing. In fact, it’s actually more accurate, when done appropriately, since it eliminates minor errors like counting a $5000 exemption on a home that only owes a $100 in taxes — if you are using only assessed values, as I have been, then that type of error is in your result.

However, if you do use ‘taxable’ values, then you definitely 100% cannot do something like take the median home value of $227,272 and add $5,000 back to it (to zero out the current $5K exemption), and then apply a 6% exemption calculation. That would result in a miscalculation, because ‘taxable’ values already have all exemptions applied (like Over 65).

To repeat that: If the $227,272 / $232,272 are medians based on ‘taxable’ values (and they are), then for many properties, other exemptions like the $70,000 Over 65 exemption will already be factored in. That means you cannot do a percentage-based calculation, like a 6% homestead exemption, on the taxable value — you would be applying a 6% exemption to the home AFTER $70K had been subtracted for the Over 65, which is incorrect. Instead, you apply the 6% to the assessed value, then you subtract $70K from that result. That comes up with a different value than doing it in reverse, which is what the city did (I think).

I am pretty confident that the city did exactly that with their median value calculations — in fact, it basically says that’s what they did in one of the meeting transcript documents where they are verbally kicking around different homestead percentages and benefits. In it, Tovo asks if they are just adding $5000 back to the $272,272 to get the ‘real’ median. The discussion then proceeds to apply a 6% calculation to the $232,272 value. But, what you have to understand, is that the $232,272 is a value arrived at by applying each home’s exemptions — it is skewed lower by Over 65 and other deductions — you can’t do any percentage-based math against it or it will be wrong.

Therefore, while I don’t know it for an absolute fact, I suspect that the reason the city revised the $5.2 million cost for a 6% HEx upwards to $7.6 million, is to account for that error caused by math using percentages against ‘taxable’ values. That is my Item 2, below. And, even if Item 2 isn’t the cause of this particular valuation correction, it is clear that it was definitely a problem & the city is aware of it, because I sent it to them days/weeks ago.

Thus, I will conclude this very long & complicated update on 2015/06/09 by saying that I consider Item 1, Item 2 and Item 3 as corrected by the City of Austin. I am still working on proving Item 5, which will take another week. Item 4 is neither a math, nor data problem, so I don’t know that there’s anything to “fix” for that one.  We are getting very near the end of these corrections — hopefully we will see the city’s numbers move north of my 2014 numbers and move very close to my 2015 calculations once Item 5 is fixed (assuming it’s a real error, of course).

 

UPDATE 6/9/2015: I just found another fiscal note document that has a cover page on it which states that it corrects a formula error in the 6% scenario for FYs 2017, 2018, and 2019. It’s not clear if this correction is another one beyond the $5.2 million to $7.6 million correction, or if that fix is included in this revised fiscal note. I don’t think it is, since the note on the cover page says this correction begins with FY2017, whereas the $7.6 million correction was FY2016. It’s also not clear if this correction is related to one of the errors I pointed out on this page, or if it is an error that I didn’t catch and they discovered on their own.

formulaerror

 


 

Intro

This webpage documents concerns I have about some of the data used in the Austin City Council’s homestead exemption work session videos from 5/6/2015. In particular, I’m on the lookout for numbers that are at odds with the homestead exemption analysis I worked on in 2014, and that Michael King included data from in an article he penned in the Austin Chronicle.

Some of the items I list below look like real problems to me. However, I could easily be wrong — I don’t have access to their new 2015 data or their methodology. UPDATE: So far, the city has corrected 1 of the items (Item 1) I’ve listed and come very close to correcting a second item (Item 3). I am working on a new way that I can prove to them that Item 5 exists & is a big deal.

 

Items of Concern

Note: This “Savings by district” graphic is referenced from some of the items below (scroll down to get to the items). The abbreviation “HEx” refers to properties claiming a homestead exemption.

 

savingsbydistrict

 

Item 1
The overall number of HEx properties is low. In particular, District 6 is much lower than it should be. This is because they failed to include the part of District 6 that extends into Williamson County (meaning they included less than half the homes they should have for that district) –

UPDATE: This item has been corrected by the city in their 2015/5/13 work session.

The city’s presentation now has 14,088 D6 properties (up from roughly 7000). My D6 count of HEx was 13,538 — with the knowledge that a few hundred were missing and I didn’t really care back in 2014. A couple of days ago I tracked down my missing ~700 and added them, putting me at 14,325. Now, the city’s D6 HEx count and my D6 HEx count are within a couple hundred of each other, which is good enough, particularly since we’re working from slightly different data sources (2015 vs 2014).

However, I estimate the city is still missing about 4500 to 5000 HEx properties — about 400 to 700 per district (other than D6). That could explain many of the other issues I see with their numbers: the low HEx median home values, the low district HEx aggregate valuations, the low valuation of all HEx homes in total, and the low cost to the city revenue to implement a 20% HEx (the city’s current estimate is equal to or less than the city’s 20% HEx cost estimate from 2014 which doesn’t seem possible). I need to add an item #5 to the list below to track this issue. (this has now been added as item 5, below)

According to an Austin Monitor article, there are about 132,000 homestead exempt (HEx) properties in the city/CAD data that was presented to the Austin City Council on May 6th, 2015. 132,000 HEx properties is low – there should be a few thousand more.

In the “Savings by district” graphic they provided, District 6 (D6) has 5.3% of the roughly 132,000 HEx homes (that graphic is included in this nonpaywalled Statesman article and also near the top of this webpage). That amounts to only 6996 homes. That is very low. That number almost exactly matches what I get if I count D6 HEx homes in my database, but using data from Travis county only. D6 actually extends into Williamson. There are several thousand more HEx homes in the D6 portion of Williamson county. These seem to be missing from the city’s analysis, as far as I can tell.

Here is some of the evidence that D6 should have more than 6996 homes:

  • Independent of the city & the CADs, I created a mysql database and loaded it from 2014 data provided by TravisCAD (TCAD) and Williamson CAD (WCAD). In my database, District 6 has 14,325 HEx properties: 7615 from WCAD and 6710 from TCAD.
  • Demographic data from the 2010 census and compiled by the city shows 16,706 owner-occupied properties in District 6. It is reasonable to assume most of those would claim homestead exemptions.
  • Page 3 of the 2014 Williamson County Assessment Roll Grand Totals shows CAU – City of Austin having 14,027 properties that are within Williamson county (Avery Ranch is an example of Austin busting out of Travis and into Williamson). Many of those 14,027 properties are owner-occupied residential properties that claim homestead exemptions (certainly at least half of them).
  • You can look at the number of registered voters to number of homestead exemptions claimed as a ratio and then compare across Austin city council districts. The old “cumulative” election report, produced by Travis County (which produces the election reports for the City of Austin), only listed the city-wide count of registered voters, so it is not useful. The old “precinct-by-precinct” election report, gave the number of registered voters for a given precinct, but it does not handle precincts that are split amongst 2 or more city council districts, which happens quite a bit under 10-1. Only the new “interactive election results” tool properly splits and attributes voter registration numbers to the correct 10-1 city council districts. Clicking here will take you to the Nov 4th 2014 election results page within the interactive tool. Once there, click on the “City of Austin” expando widget thingy. Then, look at the “Total Race Participation:” bolded text blurb at the bottom right of each 10-1 district. As you can see, the numbers for D6 look like numbers for a district with many homes, not a district with few homes (like D3 or D4, for example).
  • If roughly 6996 homes is correct, then somehow those homes would have to account for about $3.9 billion “value of homesteads” (from the “Savings by district” graphic), despite a ‘median’ home value of only $330K. Since that’s a ‘median’, rather than an ‘average’, we can’t use it to multiply by 6996 and expect to get exactly $3.9 billion. However, if you do that anyway, you can see that doing that – using ‘median’ as a rough substitute for ‘average’ –  does get you pretty close to the “value of homesteads” for every district, except District 6, making it an outlier.

So, this seems like an error on the city’s part (or by TCAD). However, I heard Van Eenoo mention Travis & Williamson a couple of weeks ago in reference to homestead data. Plus, I’ve written about this problem on this blog and on various comments on the Internets. And, last year, I  emailed Van Eenoo an (admittedly confusing) message asking whether or not Williamson data was properly included in the city’s $35.6 million estimate of the revenue costs of a 20% HEx.  (because I could only duplicate that $35.6 million number by leaving out Williamson data — that is why my estimates were always $1 million higher – $36.6 million cost to revenue for a 20% HEx – than the city’s estimate).

It occurred to me that perhaps this is a “known error”. In other words, perhaps the city is aware that Williamson data was not included. However, I no longer give this much weight, because Don Zimmerman actually called this out during the presentation (part 2 of the video). He asked why the D6 number was so low and I think someone even speculated that perhaps Williamson data wasn’t included. There was no explanation given.

The evidence is strong that 132,000 HEx is homes is too low. However, in order to avoid unnecessary complexity, I will stick to the 132,000 number for the remainder of this post.

Item 2
Total “Value of Homesteads” is low (are they using “taxable” value rather than “assessed” value? did that lead to other problems?)

In the “Savings by District” graphic, if you add up the “value of homesteads” for all districts, it comes to $35.2 billion (obviously a rough number). That number is supposed to be based on 2015 preliminary data. It should be significantly higher than the 2014 number, but it isn’t.

Using 2014 data, I came up with about $38 billion total assessed value for all HEx homes. That number is composed of $36.35 billion in assessed valuation from properties in Travis and another $1.7 billion assessed from Williamson County. We’re still talking homestead homes only, of course.

Even if I only look at the Travis County $36.35 billion from my 2014 database, it is still higher than the city/CAD’s $35.2 billion 2015 number. This could be due to the missing properties that I believe they still have in the other districts (other than D6), but I’m not sure.  Either my numbers are way off, or the numbers in the city’s presentation are way off, or their presentation is using taxable values, rather than assessed values — at least in that “Savings by district” graphic. And, to be fair, in the context of that graphic, taxable values might make sense, though it is a bit unusual.

Outside of the context of that graphic, there aren’t very many uses for taxable values, beyond printing up a tax bill or forecasting revenue. Using taxable in place of assessed, for some calculations, would lead to errors. For example, you might try to calculate a percentage-based homestead exemption and base it off the taxable value, rather than the assessed value. While it’s unlikely that TCAD or the city would make an error like that, it might explain the low total valuations and the low median home values used in the presentation and the graphic.

valdefsPerhaps lending a bit of credibility to this theory, is the 3rd point in the “Value Definitions” slide from the city’s presentation. That point appears to equate the terms taxable and assessed. Perhaps that is a common conflation in everyday speech, but in TravisCAD data, the field taxable_val and the field assessed_val, are distinct and contain very different numbers. Another slide in part 2 of the video projects taxable values by district in FY2016. Useful for forecasting future revenue, not very useful for the effects or costs of a homestead exemption at some level.

Or, perhaps my understanding of the data or the terminology is flawed. Let’s examine the terms appraised, assessed, and taxable as I understand them (my understanding is based on my interpretation of the data in the TCAD appraisal roll files, in combination with Texas law & various Comptroller documents):

Taxable values are the last value computed — it is the number you get after all appropriate exemptions have been applied to the assessed value of a given property. Assessed values are what you use in order to calculate various percentage-based exemptions — you do not use appraised or taxable or market values for that. Assessed values are often the same as appraised values, but assessed values are restricted by a 10% annual growth limit. If your appraisal is more than 10% higher than last year, then assessed will be restricted to a max of 10% higher than the prior year, even if your appraised value went up 40%, or 75% , or 300%.

To put it another way: appraised values reflect an estimate of your home’s value at the moment of appraisal, assessed values are often the same as appraised but are sometimes limited by a 10% annual growth cap set out in Texas law, and taxable values are determined by deducting all exemptions from the assessed value (and using the assessed value as the basis for calculating any percentage-based exemptions). The taxable value for a given property is multiplied by the tax rate to determine the annual tax due.

The terminology can be confusing. In everyday usage, people often use appraised interchangeably with assessed; in the data, the two are distinct. But, even in the data, the terminology varies some between counties. For example, Williamson appears to be using mktvalue in the same way appraised is used in the Travis data, and using their appraised field the way assessed is used in the Travis data. Williamson also uses HSassessed and a couple of other variants.

Item 3
Aren’t all the slides that use a median valued homestead incorrect, because they do not factor in the existing $5000 homestead exemption?

UPDATE: This item has been PARTIALLY corrected by the city/CAD in an updated version of the presentation that was emailed to CMs on or around 5/19 and briefly discussed in the 5/21 work session.

Several slides were updated — all the ones I indicated below — slides with median home values or that referred to a change in tax burden — slides 17, 18,  23, and 24.

It is not clear why these updated slides were not on the agenda to be discussed, as the new numbers drastically change the calculus on a 6% exemption for some districts. Fortunately, CM Casar noticed the new version and did bring it up during the financial discussion on Wed. 5/20.

The reason I said  ‘PARTIALLY corrected’ is due to the fact that  they are still $5 too high on the 20% HEx slides and $1.50 too high on the 6% slide. If they are inputting some other variable, then they need to show that on the slides. I think the math is clear on this, as I have indicated below (I showed my work on this weeks ago). Perhaps I’ve made an error, but it looks to me like the city’s/CAD’s numbers are still just wrong on the math on some of these slides (aside from the data problems). 

UPDATE: THIS ITEM IS FULLY FIXED NOW. I think I figured out why the new slides still looked $5 too high on everything (the “PARTIALLY corrected” stuff in the last update). It looks like they had already baked in the $5000 existing HEx into the median home value already on their slides. So, really, the actual median home value is $232,272. Thus, rather than subtracting that $5K off the $272,272 to get $222,272, as I do below, when you calculate the current tax cost, you instead need to add $5K to the $227,272 to get $232,272 when you calculate the tax due at whatever the new rate is. The difference between my initial method & the one they are actually doing is small – about $5 yearly on a 20% HEx example between mine & theirs. I thought they were $24 too high, but really they were $19 too high on a 20% HEx. The revised slides have the new, lower values. This item fully fixed. 

There are a couple of slides that show what would happen to a median valued homestead in various scenarios. Are those slides factoring in the existing $5K HEx (the .01%)?  For example:

hexexample2

A median valued home at $227,272, a tax rate of .475 per $100 of valuation, and no HEx, results in a $1079.54 tax burden. (227272 x .00475 = 1079.54)

Same calculation, but with a 20% HEx, results in a tax burden of $863.64.  (227227 x .8 x .00475 = 863.64)

Thus, the reduction in tax burden due to a 20% HEx is 1079.54 – 863.64 = $215.90 which is rounded to $216 in the table.

However, given that the $227,272 median valued house at the forecast rate of .475 would already have the current flat $5K homestead exemption, would that not make the first calculation instead be $227,272 – $5,000 = $222,272, and then 222272 x .00475 = $1055.79 ? If so, then the reduction in tax burden due to a 20% HEx, in this scenario, would be 1055.79 – 863.64 = $192.15 rather than the $216, right?

hexexample4

A similar situation arises with the 6% purple slide, I believe.

$227,272 home with no HEx and a tax rate at .475 results in a tax burden of $1079.54

Same $227,272 home but now with a 6% HEx and a higher tax rate at .4824 results in a tax burden of $1030.58.

$1079 – $1030 = $49 reduction in the tax burden. And, that’s what the table shows.

However, if I understood things, then the $227,272 house actually has a $5K HEx already, rather than no HEx. Thus, $227,272 – $5000 = $222,272. $222,272 x the .475 tax rate = $1055.79

Then, $1055.79 – $1030.58 = $25.21. Thus, the result of going from .475 tax rate with a $5K HEx to a .4824 tax rate and a 6% HEx is a tax burden reduction of $25.21 (or $2.10/month).  If you were going from NO HEx to a 6% HEx, then that would be a tax burden reduction of $49 (or $4.08/month), but that is not the situation we’re in, correct?

The $17 yearly increase listed in the table remains at $17 for non homestead exemption properties, even with the above corrections. That happens because a $227,272 non-HS property was taxed at .475 for a burden of $1079.54 and now would be taxed at .4824 for a tax burden of $1096.36.  $1096.36 – $1079.54 = $16.82 increase in the tax burden (round to $17 in the table) for non-HS properties.

Is that logic right or have I fallen victim to some math trap? Aren’t all of the slides that show savings using examples like a Median-Valued-Home wrong due to this, or ?

NOTE: They have revised their slides to fix this issue. I was pretty close, above, but I had assumed the $227,272 really was the median & subtracted $5K from it (assuming they had erred on that side of things). Instead, the actual median is really $232,272 (ie the $5K is baked in). Thus, when they calculated the new tax due, they should have been adding $5K to the $227,272, but didn’t on the original slides. So, on 20% HEx, they were about $19 too high, rather than about $24 too high as I illustrated in the examples above.

Item 4
The actual “cost” of a 20% HEx & its relation to existing $5K HEx

Some slides show a $32.5 million shortfall if one were to add a 20% HEx and not change the .475 forecast tax rate. See the light blue line in this slide. While that $32.5 million may be correct, I think some people may look at it and think that that is the cost of implementing a 20% HEx starting from no HEx, rather than starting from the current $5K HEx. I’m assuming the $32.5 change in GF Revenue is the additional amount it would cost beyond the cost of the current $5K flat HEx (since that is baked into the budget numbers to make things neutral at a .475 rate, I believe).

hexexample3

If we consider the existing $5K HEx across the roughly 132,000 HEx homes at the .475 rate, then we come up with a $3.135 million cost for the existing $5K HEx.

If we switch that to a 20% HEx, wouldn’t the cost of the 20% HEx (relative to no HEx) be the $32.5 million shortfall plus the $3.135 million that we just “got back” by canceling the $5K HEx? Making the cost of a 20% HEx (starting from no HEx)  be about $35.635 million. At the moment, I can’t seem to fully wrap my brain around this, so I may be off in the weeds on this one.

I realize that the table is providing the shortfall amount and is not attempting to provide the cost of a 20% HEx. In other words, the $32.5 million would be the cost of moving to a 20% HEx from the current $5K HEx, I believe. That’s fine — I just want to make sure people understand what the cost is. I think people may find it confusing and end up using that $32.5 million as the cost of implementing a 20% HEx from nothing. Indeed, the Austin Monitor article reports the cost of a 20% HEx at $32.5 million. A Statesman article uses similar logic & similar cost wording. Given that, it may be helpful to re-iterate that the cost in that table is additional cost, beyond the existing $3.1 million of the current $5K HEx.

 

Item 5

Even after correcting the District 6 missing Williamson County properties (Item 1), which added about 7000 or so properties, I show the city/CAD still about 4000 to 5000 properties short. This is very likely the underlying reason for most of the errors I see in their numbers. Everything in their presentation should be higher — the # of properties, the median home values, the overall total valuation, the by-district valuation, etc. I am currently working on a method to prove this to them where I can use all of their own publicly available data (I have not been able to “prove” things very easily because TCAD stupidly charges $55 for the appraisal roll and $25 for the shapefiles, which means it’s very difficult for 3rd parties to verify that what I am saying is right [or wrong]). At this point, I’m fed up with pointing out mistakes & not being to really prove it publicly, so I am going another route (that said, I will give the city credit for correcting at least some of the errors I have pointed out — the city is really at the mercy of TCAD here, according to what they tell me, they are getting numbers directly from TCAD and ar not accessing the database themselves, so everything I explain to them in the data has no point of reference for them … grrrrr).

Notes

Just general notes & comments to myself or anyone who bothers to read this far. To be clear, these items are not (possible) problems like the items above.

1) There is a slide that displays the amount of homestead exemption percentages, if any, in other cities (Ft Worth, San Antonio, Dallas, Houston). It does not show the tax rates in those cities. Evaluating homestead exemption adoption, and the amount of the homestead exemption percentage, without including the property tax rate on the same slide makes for an incomplete picture and hides an important, relevant variable (property tax rate). While home appraisals and spending are usually larger drivers of tax rates than homestead exemptions are, homestead exemptions can be, and usually are, significant impacts to revenue and clearly drive tax rates to some extent.

2) At the beginning of this post, I use the Austin Monitor article to cite the 132,000 properties. I need to go find the slide from the presentation, rather than using the article, since it is going move into the Monitor’s paywalled archive soon & the link will break. (there may be another slide or two that I should put in here to clarify parts – look for that). Actually, Ed Van Eenoo says 132,000 verbally somewhere in there, but not sure where.

3) Adler pointed out a grandfather provision added to Watson’s bill about allowing cities to do a flat dollar amount homestead exemption, rather than a percentage. He’s right about that. I read through the bill (original & amended). Looks like they made changes (I think) to make the grandfather provision (which allows keeping a percentage-based HEx) automatic, rather than requiring the homeowner to file a written request every year (which I’ve seen in mentioned in a couple of articles).  Thanks to Adler for mentioning the grandfather provision. I like the way Adler gets into this stuff & runs numbers himself & periodically takes an aside to explain things. I think he’s doing a good job from what I’ve seen.

The bill’s current language makes for tricky timing. It may be dangerous for us to do a percentage based homestead exemption this year — it may be better to wait until next year, assuming it looks like the bill will pass. If Austin waits until next year, it can adopt a flat dollar amount homestead exemption and not get saddled with some people grandfathered into a percentage-basis for the next decade, which would happen to some homes if we adopt a percentage homestead of 6% (or higher) this year, rather than sticking with our current .01% (the $5K current HEx) for a year.

Adopting a flat dollar amount HEx is a much less regressive way to help homeowners than using a percentage-based HEx. Assuming the bill passes & voters approve, then we just need to decide the amount of flat dollar HEx. Adler says he’s run the numbers and he believes something around $70,000 might be possible. That would be great, if so.

Assuming that $70K is right and we were to go ahead and pass a 6% HEx this year, then let’s see what that does next year. Every $1 million worth of home value equates to a $28,500 flat dollar amount exemption, assuming a .475 tax rate, in this scenario. So, a house worth $2.5 million would be worth just enough that if it were given a 6% HEx, it would just exceed the $70K flat HEx that Austin set (it would be $71,250 HEx). That would grandfather that home & it would automatically get the benefit of the higher 6% HEx for the next decade (assuming things otherwise stayed the same). Not a big deal. They’d only get $1,250 more in extra homestead exemption. There are only 122 homes in Austin worth more than $2.5 million, so the effect of a 6% HEx grandfathered in for those homes, every year for a decade, is pretty minimal. Even the most expensive home, valued at $7.8 million, would get an HEx benefit of only about 3 times the $70K that almost everyone else would get. That’s completely acceptable.

However, I just did quick calculation and I think the $70,000 is a bit high. I’m guessing a flat HEx amount of about $58,500 would roughly equate to the same cost to city revenue as a 20% HEx (based on 2014 HEx homes assessed values – that’s likely to change a bit for 2015). For a 6% HEx, the flat amount equivalent cost to the city would be about $17,500. Still pretty good.

We definitely want to get to a flat dollar homestead exemption with the minimal number of homes grandfathered in. If the discussion for this year is 6% HEx vs. the current $5K, then I don’t think it matters much one way or the other. With a 6% the median home gets about $4/month tax reduction. With the current $5K the median home gets about $2/month tax reduction. That’s not a huge deal either way. If we keep the current $5K (.01%) exemption, then that becomes the floor and no one get less HEx than that for the next decade — fine — and next year we can implement a sizable flat dollar HEx of $20,000 or something like that. Or, this year, if people really want the extra $2/month, we can do a 6% this year, and it only grandfather in 122 homes, plus or minus 25 homes let’s say. Those homes, will only see their HEx double, or at most triple, which is small compared to the effects of a 20% HEx on those homes.

4) Aside from Adler doing a good job, I also think Ed Van Eenoo does a terrific job. In particular, he is very good at delivering complex financial topics to people in an understandable way and almost always knows the answer to questions that arise. While I have raised a number of possible problems with the data and/or logic in this last presentation, I’m sure that he didn’t do have that much to do with a lot of the underlying data or report. I suspect TCAD created a lot of it, in concert with one or two city staff employees. To be fair to them, this stuff is much more complicated that you would think.

5) One example of complications arising from data is 4108 Westlake Drive. According to the 10-1 Find-My-District website, 4108 Westlake Drive exists in Austin’s 2-mile extra-territorial jurisdiction (ETJ). Properties in an ETJ are not t4108westlakedriveaxed by the city. However, according to TravisCAD, 4108 Westlake Drive is taxed by the City of Austin. I examined the neighbors of 4108 Westlake Drive and none of its neighbors are listed by TCAD as being taxed by the City of Austin. Every time you run across something like that, it challenges your understanding of the data. It challenges your technical setup and expertise. Did you make a mistake that caused that? Or is that in the actual data? Is there a special provision, like an interlocal agreement, that makes that procoataxedperty part of the City of Austin?  And so on. There are a lot of weird little gotchas in the data. It’s difficult to be certain of anything related to the data.

6) Why does TCAD charge $55 for the data and another $25 for the shapefiles, when everyone else puts that stuff out for free download? By keeping the data protected, they make it unclear to people like me as to how much of their data I can safely reproduce publicly or give away to someone, without risking some sort of violation. I think the data is public domain, but I’m not sure. By limiting access to the data, they make things like this analysis much more difficult. If more people were looking at their data, perhaps problems in the data would be discovered sooner, rather than much, much later.

 

Document Change History

Document created. Listed 5 major items of concern from city HEx presentation. Listed several “notes” at the end. Emailed a couple of folks at city. Tweeted a blurb about this page to #atxcouncil & #atxgov — Dylan Tynan  2015/5/8

Consolidated 5 major items into 4. Added more slide screenshots to clarify things. Reworded a bunch of stuff. — Dylan Tynan 2015/5/9

Bunch of edits for clarity today (not to change any assertions). I used weekend to go over the city’s presentation a second time, which reinforced my initial suspicions, so I toned down the “I could be wrong” CYA’s a bit. No comments from anyone yet on any of these topics – put out a couple of attention-grabbing tweets.   — Dylan Tynan  2015/5/11

Watched the city’s work session videos from 2015/5/13 which was the budget in part 1 and more homestead exemption in part 2. The city corrected the District 6 HEx count & the D6 HEx median home value (note the overall D6 HEx valuation was, oddly, already correct on their slide). Thus, I edited my item #1 below (missing D6 Williamson County properies) to list it as now fixed by the city (yea!).  …  However, I noticed a different problem with similar symptoms — all of the districts, except D6, are missing several hundred HEx properties. This might be missing condo data, the numbers are pretty close, but it doesn’t quite fit that pattern exactly. I need to add a new item for this – this could be the underlying cause of a bunch of the problems I see. More minor edits for clarity. Added doc history. Expanded note about Watson’s bill. — Dylan Tynan 2015/5/14

Marked Item 3 as PARTIALLY corrected. They are still $5 too high on their 20% numbers (in other words, a 20% HEx at .475 should be $192.15, not $197. Still, that’s a big improvement from their original $216. I sent them another email asking them to re-review Item 3 and notice my math — either I’m wrong, they’re wrong (again), or they are inputting a variable that they do not reveal on the slide.  Also, added Item 5 (they are missing 4000 to 5000 properties still), which I first uncovered while I was marking Item 1 as fixed. Minor edits to my counts in Item 1, reason #1 where I mistakenly put the old WCAD D6 count as the TCAD count (the two should have added up to 14,325, but were off a few hundred, now fixed). Added an “UPDATE:” to the very top of the page. Removed some of the other Updated repetitious stuff I had strewn about — I have a tendency to edit little bits with disregard to the rest of the doc & end up repeating stuff everywhere. Also, I am working on a method where I can prove Item 5 without using anything of my own to do it & still do it publicly — I am at arms length from TCAD (the city gets their data from TCAD mostly), so I have no way to get them to fix their stuff without publicly calling them out (I sent TCAD an email or two, but no response). — Dylan Tynan 2015/5/21

I just realized what they did on the median valued home slides. The revised slides are correct. Marked Item 3 as FULLY corrected. — Dylan Tynan 2015/5/21 (almost 5/22)

Dylan Tynan

Consultant, software developer, political wonk, etc.

Many years ago I worked for the Lee Cooke for Mayor campaign, but since then I have not worked for, nor given any money to, any political campaign.

Austin TX

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